Govt optimistic it will meet initial child poverty targets

May 30 (BusinessDesk) - The embryonic
nature of the government’s approach to policy-making
focused on ‘well-being’ is writ large by the fact that
the 2019 Budget contains just two new metrics for measuring
success.

However, the direction of future activity is
clear and the Treasury gains a $20 million funding boost to
allow it to accelerate development of the Living Standards
Framework that will form a key part of the way future
governments will be judged on performances in national
wellbeing.

And for the first time, the Budget documents
include a separate Child Poverty Report, based on the
requirements of child poverty legislation passed last
year.

The report revolves around three key metrics of
progress:

• The number of children living in poverty
before housing costs are taken into
account• • The number of children living in
poverty after housing costs are taken into
account• • The number of children living in
households experiencing ‘material
hardship’.• However, only the first two metrics
are capable of being modelled, at this stage, the child
poverty report says.

That modelling estimates that the
government should be on track to meet its first set of
targets for reducing the numbers of children living in
poverty both before and after housing costs.

According to
the 2017/18 baseline for before housing costs poverty (BHC),
some 16.5 percent, or 180,000 children were living in that
definition of poverty. On an after-housing costs (AHC)
basis, some 22.8 percent, or 250,000 children, were living
in poverty.

In 2020/21, the formal targets are to reduce
the BHC cohort to between 10.1 percent and 12.7 percent of
children. Treasury projections suggest it will come in at
around 11 percent, within the targeted band.

On an AHC
basis, the estimates suggest the government may squeak into
its target range of between 15.2 percent and 18.6 percent of
children living in poverty, which would reduce the total of
250,000 children living in poverty to between 172,000 and
212,000 children in those circumstances.

However, the
report says that the target of reducing the numbers of
children living in material hardship – a measure based on
children who lack six or more of 17 indicators of material
wellbeing – is unable to be modelled at present.

By
2028, the government is targeting 5 percent of children
still in poverty on a BHC basis, 10 percent on an AHC basis,
and 6 percent in material hardship.

The Well-Being Budget
main narrative says that ongoing government intervention to
assist people on the lowest incomes is almost inevitable in
a country “experiencing broadly favourable economic
conditions and wage growth”.

That’s because “the
general pattern is for incomes in the middle of the income
distribution to increase at a slightly faster rate than
incomes at the bottom”.

As a consequence, without
specific government intervention, rates of child poverty on
the moving-line measure will generally gradually increase
over time.”

The Budget also acknowledges that other
priorities won’t always assist wellbeing for low income
households and singles out the imposition of additional fuel
excises to fund Auckland public transport initiatives as an
example.

However, the Treasury has not tried to include
that additional cost in its modelling, while the Budget
suggests that “in the longer term, transport costs for
families could come down owing to resulting investment in
roads, rail and transport”.

Elsewhere, the Budget
acknowledges that the Treasury’s LSF work is “a first
version and further work is needed to ensure future versions
improve known gaps and limitations” and “look for
opportunities to increase alignment” with a national
indicators dashboard being developed by Stats NZ.

The
Budget acknowledges it is “too soon to tell” whether the
new focus on collaborative policy-making that constantly
assesses well-being impact is succeeding and warns that it
is “important we don’t get too fixated on targets
alone”.

“Some initiatives may not affect the headline
numbers on the primary measures but will still make a
material difference to the lives of children and families
living in
poverty.”

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